Suppose a Corporation Issues 5,000 Shares of $1 Par Common

question 64

Multiple Choice

Suppose a corporation issues 5,000 shares of $1 par common stock for $30 per share. In addition to the increase in cash, what effect does this transaction have on the accounting equation?

• A)Retained earnings increases $150,000.
• B)Paid-in capital in excess of par increases $145,000.
• C)Common stock increases $150,000.
• D)Gain on stock issuance increases $145,000.

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Definitions:

Social Psychology

The scientific study of how individuals' thoughts, feelings, and behaviors are influenced by the actual, imagined, or implied presence of others.

Influence

The capacity to have an effect on the character, development, or behavior of someone or something, or the effect itself.

Relate

To establish a connection or association between two or more things, often used to describe how individuals connect or interact with one another.

Experimental Psychologist

A professional in psychology who specializes in designing and conducting experiments to study behavior and mental processes.